Examining the impacts of environmental, social and governance (ESG) on employee engagement: a study of Generation Z

Abstract

Purpose

The literature currently offers only fragmentary insights into the research on the relationship between environmental, social and governance (ESG) and employee engagement from the perspective of Generation Z. Therefore, we aimed to bridge this knowledge gap by identifying the impact of ESG dimensions on the engagement of Generation Z employees.

Design/methodology/approach

Drawing on the literature review findings, we formulated a conceptual model to illustrate the relationship between ESG dimensions and employee engagement. We conducted a confirmatory analysis using structural equation modeling (SEM CFA) on a sample of 207 Generation Z employees to validate the proposed model. We collected the data in June 2024.

Findings

We designed a quantitative study to test a model depicting the relationship between ESG dimensions and employee engagement. The results indicated a strong influence of social and corporate governance-related ESG on the engagement of Generation Z employees. The study did not show a relationship between environment-related ESG and the engagement of Generation Z individuals.

Originality/value

The study bridges the gap in our understanding of the link between ESG and the engagement of Generation Z employees. It suggests the necessity to further investigate the specific impact of individual ESG practices on employee engagement. We recommend expanding the scope of future research to examine the components of the constructs studied as well as the mediators and moderators of the relationship between ESG and employee engagement for Generation Z employees.